PACRA Upgrades Asset Manager Rating of JS Investments Limited

The rating upgrade reflects JS Investments Limited's (“JSIL” or the “Company”) highly experienced and skilled team, robust governance framework, strong risk and compliance management, and a disciplined and well-structured investment process. The Company's focus on building a technology platform and revenue stability through a diversified product mix, including fee income from CIS, REIT, and SMAs, are key rating drivers. The investment team benefits from strong trading support and automated, scalable systems, ensuring efficient operations. Policies, risk budgets, and limits are well-defined across all funds. The Company has significantly invested in digital services to enhance customer engagement, offering solutions like customer onboarding, SMA wealth management, digital pension fund onboarding, and a WhatsApp bot. The Zindigi App, aimed at Gen Z and millennials, delivers user-friendly financial solutions. These technological investments have driven notable inflows through digital channels. Tailored products such as JS Micro-finance Sector Fund, JS KPK Pension Fund, and JS Fixed Term Munafa Plans showcase innovation and strengthen the rating. The AUMs reached ~PKR 101bln, growing ~51% since Dec'2023, capturing ~3% market share as of the end Nov'2024. In addition, ~PKR 21bln was contributed by Advisory funds. While the AUM mix leans toward corporates, enhanced retail penetration is expected to yield competitive advantages. However, high top-10 investor concentration requires diversification for long-term stability. In the trailing 12 months ending Sep'2024, the majority of the funds ranked in the top quartile, with equity category performance aligning with industry trends. Sustaining fund performance across categories and maintaining strong credit quality metrics will be key for future ratings.
During 9MCY24, the Company reported a 100% increase in core revenue, reaching PKR 343mln (9MCY23: PKR 171mln). Supported by higher core revenues, realized/unrealized investment gains, and dividend income, profitability rose to PKR 256mln (9MCY23: PKR 117mln). The Company's equity stood at PKR 1.9bln as of Sep'2024 (Dec'2023: PKR 1.7bln). The rating incorporates the Company's association with JS Bank Limited and potential synergies due to the established presence of JS Group in the financial sector.
The rating relies on the Company’s ability to enhance its market position in AUMs, maintain superior fund performance, and uphold strong governance and organizational structure. Improving investor granularity and increasing retail penetration through digital channels will be crucial.

About the Entity
JSIL, established in 1995, is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has a strong presence in the financial sector with entities operating in the banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JSIL possesses licenses for Asset Management, Investment Advisory, Private Equity/Venture Capital, and REIT management. JSIL’s control lies with an eight-member board of directors, including the CEO. The Board comprises three independent directors, with all other directors, except the CEO, being non-executive.